Issue #94
| Recommendation: For each $25,000 you are trading …
1. Buy 100 shares of the PowerShares DB US Dollar Index Bullish Fund, symbol UUP, at the market and enter a protective order to sell 100 shares of PowerShares DB US Dollar Index Bullish Fund, symbol UUP, at $18.80 stop, good till cancelled. 2. Cancel and replace your order to sell ALL of your shares of VelocityShares 3x Long Natural Gas ETN, symbol UGAZ, at $24.25, stop. NEW PRICE: $33.25 stop, good till cancelled. 3. Cancel and replace your order to sell ALL of your shares of ProShares UltraPro Short S&P 500, symbol SPXU, at $58.68, stop. NEW PRICE: $62.23 stop, good till cancelled. |
Dear Member,
Natural gas surged sharply higher yesterday, catapulting the VelocityShares 3x Long Natural Gas ETN (UGAZ), to as much as a 36% gain. Not bad for owning the position just over a day!
Meanwhile, the equity markets remain under pressure, and the recommended position in the ProShares UltraPro Short S&P 500 ETF (SPXU), is now showing an open gain of roughly 8.5%.
Gas is headed higher, after a brief pullback, so stay long UGAZ. But now raise your protective sell stop per the above table, from $24.25 to $33.25.
Stocks are likely to bounce short-term, but the trend is now firmly lower. Hold your shares in ProShares UltraPro Short S&P 500 (SPXU), but raise your protective sell stop now from $58.68 to $62.23.
Note that I will be looking to add to your SPXU position on a bounce, so stay alert.
Gold and silver are meandering around in no man’s land. Yes, gold has rallied, but it has not even been able to take out the first major level of resistance at the $1,289 level. Meanwhile, silver is sickly, down almost 15 cents this morning, breaking short-term support at $19.55.
Bottom line: Although this month’s cyclical target for a major low in the precious metals has passed, there is no confirmed trend change to the upside, and to the contrary, both gold and silver remain in downtrends.
Hold your gold inverse ETFs, PowerShares DB Gold Double Short ETN (DZZ) and VelocityShares 3X Inverse Gold ETN (DGLD), with your stops in place.
Lastly, my models are showing an imminent strong rally in the U.S. dollar, as capital flees the equity and emerging markets and heads into cash, which, by default, is bullish for the buck.
Therefore, I am recommending a long position in the Dollar Index via the above referenced ETF, PowerShares DB US Dollar Index Bullish Fund (UUP). Buy your shares at the market this morning on the opening and simultaneously place your protective sell stop as noted above.
Stay tuned!
Best,
Larry
